CPT Josh Stiltner's Insight on Overcoming Chile's Bureaucratic Barriers

CPT Josh Stiltner, Latin America Seminar, ARAC 03-07, USAJFKSWCS
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Introduction
The Republic of Chile is one of South America’s most prosperous nations, socially,
economically, politically, technologically, and militarily. It’s geographic location and rich
mineral deposits have contributed to the historical and modern-day economic successes. Its
social ministers put priority in education, housing, healthcare, and its social security system
rivals that of the United States. The domestic infrastructure is modern and well maintained.
The press has complete freedom of expression and unlimited access to government agencies and
politicians and the Chilean Internet is growing exponentially. The democratic government is
regarded as the most free and most stable in South America. The Armed Forces of Chile are the
dominant military power in the region and have never been defeated. But there is one area of
Chilean society that is widely regarded as in need of repair; the thick, never-ending, stifling
bureaucracy from the local municipal office clerk to the local bakery to the city mall to the
President herself. Tourists and Chileans alike complain of having to present books of documents
certifying this and that and the other, all in triplicate, stamped and signed by every employee
with a pulse, then certified by a notary public (there’s one on every street corner), and then sent
registered mail to the office next door. For example, buying a mobile phone at the local
Movistar retail store is similar to buying a car. First you talk to the floor sales person about what
kind of phone you’d like. Then that sales person hands you a sales sheet with your selection to
take to the contract agent. The contract agent goes over what kind of contract you want, takes
your credentials, checks your credit rating, fills out the paperwork with you and hands you an
invoice to take to the pay agent or “cash cage.” The pay agent takes your payment and gives you
a receipt to take back to the contract agent. Once the contract agent confirms that you’ve paid
for your phone and your first month of service you are directed to the phone agent that will give
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you your phone and the instructions to activate it. So if you add the four personnel you have
talked with, plus the greeter at the door, and go ahead and count the uniformed security guard
patrolling the Bluetooth aisle, you’ve had to deal with 6 people to get a mobile phone. Compare
that to 30 minutes online at att.com in your underwear on your couch from your home computer.
This was just one example in many. With so many accomplishments and so few national “black-
eyes” in history compared to its regional neighbors, why does this soviet-era method of social,
business, political, and to a lesser degree military way of interaction persist?
Bureaucracy is this context can be likened to a “speed bump” on the road to progress.
When person a wants to accomplish task b, i.e., open a small business, they have to complete
tasks c through z. Basic psychology tells us that reinforcement, positive in a positive way or
negative in a positive way, motivates humans to do something, anything. Punishment is negative
reinforcement in a negative way. Positive reinforcement for applying for a business license
through the government would be speedy, logical, professional service in assistance with
information and completing paperwork. This would compel people with the knowledge and
capital to become apart of the formal economy through customary business practices. But how
does an economy grow at the rate that Chile’s does when around every corner of
entrepreneurship is another bureaucrat at their desk requesting a certificate of authenticity,
notarized of course, for their license to apply for a notarized copy of the local building codes?
This is the definition of punishment. This reinforces people’s actions in a negative way, often
persuading people to become a part of the informal economy, aka, the black market, eroding the
tax base to finance the government and anything it wants to do for its people.
Is Chile’s penchant for bureaucracy restraining it from its true potential socially,
economically and politically? This paper will analyze the historical background and 7 elements
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of national power; Physical Environment, Social, Infrastructure and Technology, Economic,
Information, Political, and National Defense systems to determine the root cause of bureaucracy
and show that efforts to minimize the “red-tape” would propel Chile into the 21st century as a
first-world nation. The historical background is from a political perspective but is important to
understand prior to learning about the elements of national power and their relation to the state of
Chilean Bureaucracy.
Historical Background
The southernmost nation of Latin America and one of the longest and narrowest nations
in the world, Chile may derive its name from the indigenous Mapuche word "Chilli," which may
mean "where the land ends. The Spanish conquistadors heard about Chilli from the Incas of Peru,
who had failed to conquer the land inhabited by the Araucanians, of which the Mapuche in
central Chile was the most warlike group (http://countrystudies.us/chile/).
Despite its geographical isolation by formidable barriers--the Andes Mountains on its
eastern flank, the Atacama Desert in its northernmost area, and the Pacific Ocean on its western
side-- Chile, after Uruguay, traditionally has been one of South America's best educated and
most stable and politically sophisticated nations. Chile enjoyed constitutional and democratic
government for most of its history as a republic, particularly after adoption of the 1833
constitution. After a period of quasi-dictatorial rule in the 1920s and early 1930s, Chile
developed a reputation for stable democratic government. Like Uruguayans, Chileans have
benefited from state-run universities, welfare institutions, and, beginning in 1952, a national
health system. Chilean universities, for example, contributed to the Chileans' strong sense of
national identity (http://countrystudies.us/chile/).
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Throughout the 1970-90 periods, however, Chilean national identity was tested as the
country was subjected to profound political, economic, and social changes. Although the country
began the 1970s by embarking on what soon proved to be a disastrous experiment in socialism, it
ended the 1980s with a widely acclaimed free-market economy and a military government that
had committed itself, albeit inadvertently, through a plebiscite, to allowing a transition to
democracy in 1990. Since the restoration of democracy, Chile has served as a model for other
developing nations and the East European countries that are attempting to make a similar
transition to democratic government and an antistatist, free-market economy. Yet the Chileans
endured rough times before finding an economic prescription that works for them
(http://countrystudies.us/chile/).
During the ill-fated Popular Unity (Unidad Popular) government of its Marxist president,
Salvador Allende Gossens (1970-73), Chile experienced uncharacteristic economic and political
turbulence. As economic and political conditions deteriorated rapidly in August 1973, the
Chilean Armed Forces and even the moderate Christian Democratic Party (Partido Demócrata
Cristiano--PDC), Chile's largest single party, began to view the Allende government's socialist
economic policies as a threat to the constitutional order that the armed forces felt duty-bound to
uphold, at whatever cost. On September 11, 1973, the armed forces shocked the world by
attacking the lightly defended presidential palace, La Moneda, with army troops and aerial
bombardment. Led by newly appointed army commander General Augusto Pinochet Ugarte, the
bloody coup seemed incongruously violent for a country of Chile's democratic and civil
traditions, especially considering that Allende had been elected democratically and had won a
substantial 43 percent of the vote in the March 1973 congressional elections. Not having fought a
real war since the War of the Pacific (1879-83) against Peru and Bolivia, the army seemed to
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welcome a pretext for reminding Allende's supporters of the military option contained in their
own national motto, "By reason or by force” (http://countrystudies.us/chile/).
The Allende episode has remained politically charged during the past two decades, as
evidenced by the march by Socialists and Communists on La Moneda and their skirmishes with
police on the occasion of the twentieth anniversary of Allende's overthrow. A peculiar aspect of
the historiography of the military coup, one that is illustrative of the political sensitivities
surrounding it, is how Allende's death has been described. Some scholars have mentioned both
versions of his death--the official military account that he committed suicide and the left-wing
version that he was assassinated by the military. Others, including historian Mark Falcoff, have
used the more noncommittal phrase that Allende "died in the coup." Thanks in large part to the
assassination myth that Cuban president Fidel Castro Ruz and Colombian novelist Gabriel
García Márquez helped to create, the left-wing version is still widely believed. Available
evidence, however, is adequate to reasonably conclude that Allende committed suicide with the
AK-47 assault rifle given him by Castro. Scholars such as Paul E. Sigmund and James
Dunkerley believe it was suicide, and reference sources and mainstream news media tend to use
this version. For example, in a New York Times report on the twentieth anniversary of the coup,
correspondent Nathaniel C. Nash states that Allende "killed himself rather than be taken"
After the overthrow of the Allende government, Chile was plunged into a long period of
repressive military rule. According to the National Commission on Truth and Reconciliation (the
Rettig Commission), an eight-member investigatory body created by the government of Patricio
Aylwin Azócar (1990-94), the armed forces and security forces were responsible for the deaths
of 2,115 Chileans in the years following the 1973 coup, as well as the systematic torture or
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imprisonment of thousands of other opponents of the Pinochet regime
Beginning with the Allende government and continuing with the military regime of
General Pinochet (1973-90), Chile underwent two decades of social, economic, and political
restructuring. As political scientist Arturo Valenzuela points out in the "Government and
Politics" chapter, the Pinochet regime, ironically, proved to be "the longest and most
revolutionary government in the nation's history." Although the Pinochet regime adopted a
system of local government administration based on corporatism, it avoided the corporatist
economic policies often associated with authoritarian military rulers and favored by Chile's
industrial bourgeoisie and landowning class. Instead, Pinochet listened to economic guidance
offered by students of the University of Chicago's Milton Friedman, a spokesman for
monetarists. This connection developed because of the Catholic University of Chile's exchange
program with the University of Chicago, whose Chilean graduates won Pinochet's ear.
Determined to transform Chile's statist economy, Pinochet embraced the free- market, export-
oriented economic model recommended by the so-called "Chicago boys". These policies called
for integrating the Chilean economy into the world economy, privatizing nationalized industries
as well as the social security and health sectors, sharply reducing the number of public
employees, adopting monetarist policies, deregulating the labor market, and carrying out a
sweeping tax reform, among other measures (http://countrystudies.us/chile/).
By the late 1980s, the Chilean economy was again booming, and other developing
countries were looking to it as an economic model. The regime's drive to privatize was an
important indicator of the transition to a market economy. Of about 550 firms under state control
in the 1970s, fewer than fifty remained so by the end of 1991. Whether Chile's structural
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transformations could have been carried out by a democratic government is unclear. By the early
1990s, Argentina's democratically elected president, Carlos Saul Menem, had achieved
comparable reforms without sacrificing democracy or human rights. However, the success of the
Pinochet model in Chile probably had less to do with authoritarianism per se than it did with the
authoritarian implementation of antistatist, free-market policies (http://countrystudies.us/chile/).
Fortunately for the future of Chilean democracy, Pinochet was unable to carry out his
plan to permanently abolish traditional political parties and institutions and continue ruling as
Chile's president for most of the 1990s. His mistake (and Chile's gain) was to hold a plebiscite on
a key provision of the Pinochet constitution, which voters had approved on September 11, 1980.
The 1980 constitution provided for the gradual restoration of democracy by 1989, but it would
have extended Pinochet's presidency through most of the 1990s. An overconfident Pinochet
proceeded with the constitutionally mandated plebiscite on October 5, 1988, and was shocked
when nearly 55 percent of registered voters indicated their preference for open elections in late
1989, while only 43 percent voted for allowing Pinochet to remain president through 1997.
According to Arturo Valenzuela, the opposition basically outfoxed Pinochet and won the
plebiscite "following Pinochet's rules" (http://countrystudies.us/chile/).
Aylwin, a Christian Democrat, easily won the long-awaited presidential election on
December 14, 1989, as the candidate of the Coalition of Parties for Democracy (Concertación de
Partidos por la Democracia--CPD), winning 55.2 percent of the vote. In concurrent congressional
elections, the CPD also won a majority of elected seats in both houses of Congress. However, the
coalition was unable to offset the nine Pinochet-designated senators, making the CPD's plans to
further reform the military-designed constitution unattainable for the foreseeable future
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Whereas the free-market policies adopted by Uruguay in 1990 met with strong resistance
from a population accustomed to a generous cradle-to-grave welfare system, in Chile similar
policies met with support from all sectors of society. Chile emerged not only as a showcase of a
successful transition to moderate democratic government but also as a widely admired economic
model for the developing world, achieving a GDP growth rate of 5.5 percent in 1991, with an
unemployment rate of only 6.5 percent, and an unprecedented 9 percent GDP growth rate in
1992(http://countrystudies.us/chile/).
Chile's economic reforms had their downside. As Samuel Valenzuela points out, the
Pinochet regime's social and economic policies led to increased socioeconomic inequalities, and
urban and rural poverty remained extensive. The severe structural transformations, combined
with the two harsh recessions and high debt-service obligations, aggravated the already high
inequality of income distribution. More than 40 percent of the population, or about 5 million
Chileans, remained poor, with 1 million of them living in extreme poverty. The standard of
living of many Chileans was further reduced by the declining quality of schooling and health
care and inadequate land reform. Although the regime made heavy investments in programs for
the very poor, thus helping to lower the infant mortality rate and raise life expectancy, its land
reform measures were not particularly effective (http://countrystudies.us/chile/).
The Aylwin government funneled at least 20 percent more resources into social
programs, such as education, housing, and health, by raising taxes and seeking foreign
assistance. Under the Aylwin government, the income of the lowest quintile of the population
increased by 30 percent in 1990-93. By 1992 the proportion of Chileans living in poverty had
decreased to 33 percent, from 45 percent in 1985. This amounted to 4.2 million Chileans living
in poverty in 1993, with 1.2 million living in extreme poverty (http://countrystudies.us/chile/).
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The Aylwin government also continued the privatization of social security, begun by the
military regime in 1981. By the end of Aylwin's term, Chile's pension reform was the envy of the
world. Officials from developing as well as developed nations were visiting Chile to see how it
was done. By 1994 the system was managing assets of US$19.2 billion, giving Chile a savings
rate similar to some Asian nations. Thanks in large part to its pension fund, Chile now has a
strong capital market consisting of stocks, bonds, and other financial instruments
As a democratic political model, the Aylwin government had a major handicap, namely
the military, which, according to Arturo Valenzuela, has served as a virtual autonomous power
within the government. With the help of its rightist allies in Congress, the military demonstrated
its influence by derailing the Aylwin government's cautious but determined attempts to prosecute
military officers for past human rights abuses. Aylwin refused to support the enactment of a
blanket amnesty law, such as the one approved by Uruguay's General Assembly for military
officers accused of human rights abuses committed between 1973 and 1978
Aylwin's generally very successful presidency, particularly his handling of the economy,
assured a continuation of democratic government under another politically moderate president,
especially the well-regarded son of Eduardo Frei Montalva (1964-70), one of Chile's most
respected presidents. Eduardo Frei Ruiz-Tagle entered politics only in 1989, when he ran
successfully for a Senate seat from Santiago. Frei's coalition easily won the presidential election
on December 11, 1993, with nearly 58 percent of the vote, compared with 24 percent for Arturo
Alessandri Besa, Frei's closest challenger and candidate of the newly formed center-right
coalition called the Union for the Progress of Chile (Unión por el Progreso de Chile). Frei
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received the largest popular mandate of any Chilean leader since 1931. The election was a sort of
reverse replay of the 1958 election, when Frei's father was defeated by Alessandri's uncle, Jorge
Alessandri Rodríguez (president, 1958-64). Moreover, Frei Ruiz-Tagle allied himself with the
PS, whereas his father joined in an alliance with the right, specifically the National Party (Partido
Nacional). In sharp contrast to the presidential elections of September 4, 1970, the unexciting
elections of December 11, 1993, lacked left-wing and right-wing rhetoric. The vast majority of
Chileans, enjoying Latin America's strongest economy, were apparently content to let the
government remain in the hands of the political center, namely Frei Montalva's son. Although
Frei Ruiz-Tagle, unlike his late father, is not distinguished for his public oratory, Chileans
regarded his low- key, non-confrontational, and statesmanlike campaigning style, as well as his
penchant for consensus-building, as positive traits (http://countrystudies.us/chile/).
Nevertheless, daunting challenges in the form of military resistance faced Frei in his
plans to seek to amend the Pinochet-era constitution. These plans included abolishing the eight
"designated" Senate seats, reforming the electoral system, and making the army commander,
General Pinochet, and the other military commanders accountable to elected officials. Frei's
political agenda also included less politically sensitive goals, such as improving secondary and
higher education, consolidating Chile's political democracy, modernizing public services, and
giving priority to rural development and eradication of poverty (http://countrystudies.us/chile/).
On the foreign front, Frei appeared to be inclined to reverse Chile's disinterest in regional
trade pacts. In particular, his government was reassessing the potential benefits of joining the
Southern Cone Common Market (Mercado Común del Cono Sur-- Mercosur) and expected that
Chile would become an associate member by January 1995. After the United States Congress
ratified the North American Free Trade Agreement ( NAFTA) in November 1993, Chile began
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lobbying to join a similar agreement with the United States (one which would drop the "North"
from NAFTA), citing President Bill Clinton's position that Chile was "next in line" to join
NAFTA. Total bilateral trade between Chile and the United States amounted to US$4.1 billion in
1993. Unlike Chile's pre-coup democracy, its democracy of the 1990s remained fettered by a
military with a strong institutional role in government, a military that will not likely tolerate a
departure from the economic policies that constitute the principal accomplishment of its
seventeen years in power (http://countrystudies.us/chile/).
Following an agreement in 1993 between Pinochet and Andrés Zaldívar Larraín,
president of the Senate during Frei’s presidency, the latter voted to abolish the date of 11
September as a National Holiday which celebrated the 1973 coup. Supporters of Pinochet had
blocked until then any such attempt. The same year, Pinochet traveled to London for an
operation. But under orders of Spanish judge Baltasar Garzón, he was arrested there, lifting
world-wide attention, not only because of the past history of Chile and South America, but also
because this was one of the first arrest of a dictator based on the universal juridiction principle.
Pinochet tried to defend himself by referring to the State Immunity Act of 1978, an argument
rejected by the British justice. However, UK Home Secretary Jack Straw took the responsibility
to release him on medical grounds, and refused to extradite him to Spain. Thereafter, Pinochet
returned to Chile in March 2000. Upon descending the plane on his wheelchair, he stood up and
saluted the cheering crowd of supporters, including an army band playing his favorite military
march tunes, which was awaiting him at the airport in Santiago. President Ricardo Lagos, who
had just sworn in on March 11, said the retired general's televised arrival had damaged the image
of Chile, while thousands demonstrated against him (http://en.wikipedia.org).
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Representing the Concertación coalition for democracy, Ricardo Lagos had won the
election just a few months before, by a very tight score of less than 200,000 votes (51,32%)
against Joaquín Lavín (less than 49%), who represented the right-wing Alliance for Chile. None
of the six candidates had obtained an absolute majority on the first turn held on December 12,
1999. Lagos was sworn in March 11, 2000, for a 6-year term. In 2002 Chile signed an
association agreement with the European Union (comprising FTA, political and cultural
agreements), in 2003, an extensive free trade agreement with the United States, and in 2004 with
South Korea, expecting a boom in import and export of local produce and becoming a regional
trade-hub (http://en.wikipedia.org).
Meanwhile, trials concerning human rights violations during the dictatorship continued.
Pinochet was stripped of his parliamentary immunity in August 2000 by the Supreme Court, and
indicted by Judge Juan Guzmán Tapia. Guzmán had ordered in 1999 the arrest of five militaries,
including General Pedro Espinoza Bravo of the DINA, for their role in the Caravan of Death
following the 11 September coup. Arguing that the bodies of the "disappeared" were still
missing; he made jurisprudence which had as effect to lift any prescription on the crimes
committed by the militaries. Pinochet's trial continued until his death on December 10, 2006,
with an alternance of indictments for specific cases, lifting of immunities by the Supreme Court
or to the contrary immunity from prosecution, with his health a main argument for, or against,
his prosecution. The Supreme Court affirmed in March 2005 Pinochet's immunity concerning the
1974 assassination of General Carlos Prats in Buenos Aires, which had taken place in the frame
of Operation Condor. However, he was deemed fit to stand trial for Operation Colombo, during
which 119 political opponents were "disappeared" in Argentina. The Chilean justice also lifted
his immunity on the Villa Grimaldi case, a detention and torture center in the outskirts of
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Santiago. Pinochet, who still benefited from a reputation of righteousness from his supporters,
lost legitimacy when he was put under house arrest on tax fraud and passport forgery, following
the publication by the US Senate Permanent Subcommittee on Investigations of a report
concerning the Riggs Bank in July 2004. The report was a consequence of investigations on
financial funding of the September 11, 2001 attacks in the US. The bank controlled between
USD $4 million and $8 million of Pinochet's assets, who lived in Santiago in a modest house,
dissimulating his wealth. According to the report, Riggs participated in money laundering for
Pinochet, setting up offshore shell corporations (referring to Pinochet as only "a former public
official"), and hiding his accounts from regulatory agencies. Related to Pinochet's and his family
secret bank accounts in United States and in Caribbean islands, this tax fraud filing for an
amount of 27 million dollars shocked the conservative sectors who still supported him. Ninety
percent of these funds would have been raised between 1990 and 1998, when Pinochet was chief
of the Chilean armies, and would essentially have come from weapons traffic (when purchasing
Belgian 'Mirage' air-fighters in 1994, Dutch 'Léopard' tanks, Swiss 'Mowag' tanks or by illegal
sales of weapons to Croatia, in the middle of the Balkans war.) His wife, Lucía Hiriart, and his
son, Marco Antonio Pinochet, were also sued for complicity. For the fourth time in seven years,
Pinochet was indicted by the Chilean justice (http://en.wikipedia.org).
The Concertación again won the 2006 presidential election. Michelle Bachelet, first
woman president, won against Sebastián Piñera (Alliance for Chile), with more than 53% of the
votes. Most of Bachelet's first three months as president were spent working on 36 measures she
had promised during her campaign to implement during her first 100 days in office. They ranged
from simple presidential decrees, such as providing free health care for older patients, to
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complex bills to reform the social security system and the electoral system
(http://en.wikipedia.org).
Bachelet's first political crisis came in late April 2006, when massive high school student
demonstrations —unseen in three decades— broke out throughout the country demanding a rise
of quality levels in public education (see: 2006 student protests in Chile). These protests and a
sharp drop in her popularity, forced Bachelet to reshuffle her cabinet after only four months in
office— a record in the country's history (http://en.wikipedia.org).
The final months of 2006 were marred by reports of alleged misspending of public funds
during the previous administration, especially in Chiledeportes, a government sports funding
organization. There were also accusations of misappropriation of funds channeled through
phantom firms and identity theft to fund congressional campaigns in late 2005. The scandal
prompted Bachelet to present an anti-corruption plan in late November. Other issues faced by
Bachelet during her first year included, the death of former dictator Augusto Pinochet, a
controversial decree allowing for the free distribution of the "morning-after pill" to girls as
young as 14 years of age without parental consent, a nine-month Government-Congress deadlock
over the naming of a new Comptroller General, and a difficult implementation of a new public
transport system for the capital Santiago. The latter issue scaled into a major crisis (fueled by an
extensive and critical media coverage and an aggressive right-wing opposition) that damaged her
popularity and which resulted in Bachelet adjusting her cabinet for a second time, just two weeks
into her second year. Bachelet has also had to face internal opposition coming from a number of
dissatisfied lawmakers from both chambers of Congress—the so-called díscolos ("disobedient,"
"ungovernable")—, which have jeopardized the coalition's narrow Congress majority on a
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number of key government-sponsored bills, forcing her to negotiate with an obstructionist right-
wing opposition (http://en.wikipedia.org).
Figure 1. Regional Map of Chile
The Physical Environment System of Chile has been
attributed to the Political, Economic,
Infrastructural/Technological, and Military successes of that
country both historically and in modern times. Twelve
Regions, numbered north to south, plus the Metropolitan
Region of the national capital, Santiago de Chile. The
country changes significantly from north to south. Region I
encompasses one of the driest places on Earth, the Atacama
Desert, and Region XII encompasses one of the coldest and
wettest places, Patagonia. Regional boundaries are drawn
along naturally occurring topographic features. Regional
Governments and their Capitals assist the national
government in local governance, supplying services and
information to the regional populations. (Olivos Salinas,
2002)
During colonial times the Spanish Conquistadores
found it so difficult to reach the country by ship, and
therefore so difficult to return to Spain, that once they arrived
the majority stayed to start life anew in the new world.
Unlike neighboring Peru, Bolivia and Argentina this resulted
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in the natural resources and riches staying in the country and not being sent back to the Queen in
Madrid for rewards. The long Andean ridge on the eastern border, the unforgiving Atacama
Desert in the North, the Pacific Ocean to the west, and frigid Antarctica to the south kept Chile
isolated from the rest of the continent, and the world, and it’s political and military problems
throughout history with few exceptions.
The lack of imported slave labor post-independence contributed to the relatively high cultural
homogeneity found today from one end of the country to the other. Because of this low cultural
disparity the country has been able to avoid many of the social problems found in the rest of the
region dealing with equal rights for indigenous Indians and the different socio-economic status,
language, and political ideologies associated with them.
The long, impossibly thin line of Chile has always produced a tiny moment of
astonishment. Chile stretches over 4,300 km (2,700 mi) along the southwestern coast of South
America, a distance roughly the same as that from San Francisco to New York, or Edinburgh to
Baghdad. At the same time, its width never exceeds 240 km (150 mi), making the country more
than eighteen times longer than its widest point. The most obvious factor in Chile's remarkable
slenderness is the massive, virtually impassable wall of the Andes, a mountain range that is still
rising and that contains more than fifty active volcanic peaks. The western border is of course the
Pacific Ocean, but it is a misconception to picture Chile as nothing more than the steep western
slope of the Andean peaks (www.geographia.com).
All along its length Chile is marked by a narrow depression between the mountains and
the sea. To the north the land rises and becomes more arid, until one reaches the forbidding
Atacama Desert, one of the most inhospitable regions on earth. To the south just the opposite
transformation takes place: the land falls away, and the region between mountains and ocean
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fades into the baffling archipelagic maze that terminates in Chilean Patagonia. Chile's southern
extremity is marked by Cape Horn, a treacherous headland surrounded by almost continuously
Figure 2. Geology of Chile
storm-tossed seas and passable only through the foggy stillness
of the Strait of Magellan. The topography/hydrology of Chile
creates many natural obstacles, most notably the Atacama desert
to the north along the borders of Peru and Bolivia, the Andes
Mountains along the eastern border with Argentina, the Antarctic
archipelago to the south and southeast, and the Pacific Ocean
along the western border. Historically and currently the remote
accessibility of the country from all cardinal directions has
contributed to the National Security and preservation of natural
resources.
Attacks from Argentina would be restricted to easily
defended mountain passes and aerial routes. Ground attacks
from Peru and Bolivia would be restricted to the unforgiving and
easily detectable Atacama desert by the Andes mountain range.
Naval attacks from Peru with the elements of surprise could have
limited success in the coastal town of Iquique (Zamora Flores,
2002).
As shown Figure 2 large deposits of volcanic debris and
ash contribute to the rich soil and large agricultural industry of
Chile. The location on Chile in the southern hemisphere allows
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agricultural industries to export their growing season (MAR-AUG) crops to countries in the
Figure 3. Topography and Hydrology of Chile
northern hemisphere
during their non-
growing season (OCT-
MAR). Agriculturally
Chile is famous for
exporting fruits,
vegetables, textiles and
wine. The dry climate
and prehistoric
(Quaternary) mineral
deposits in the Atacama
allow Chile to be the
largest exporter of
copper in the world. In
the center of the
country, however, is a
long and expansive river valley, shown in Figure 3, a five hundred mile corridor occupied in the
north by vineyards and great farms and in the south by primeval forests and enchanting lakes.
Santiago, the capital, anchors the northern and more prosperous section of the central valley.
The lush Lake District to the south, however, is the homeland of Chile's indigenous peoples, the
Araucanians. Also parts of Chile are two notable Pacific possessions-the Juan Fernandez Islands
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and the famous Easter Island, both of which are administered as national parks. The Juan
Fernandez Islands are located about 670 km off the Chilean coast, while Easter Island is situated
3700 km distant.
Chile's climate is as diverse as its geography. Aside from the obviously extreme climatic
conditions of the Andes and the Atacama, however, the country enjoys a comfortable temperate
climate. (www.geographia.com/chile) Much of the country has a mountain climate with snow
in the higher reaches. The north is desert, warm during the day but very cool at night. The central
part has a Mediterranean climate with a rainy season between May and August. The south is
cold, bitterly so in winter, and often wet.
Santiago Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Rainfall (mm) 3 3 5 13 64 84 76 56 31 15 8 5
Rainfall (inches) 0.1 0.1 0.2 0.5 2.5 3.3 3 2.2 1.2 0.6 0.3 0.2
Min Temp (°C) 12 11 9 7 5 3 3 4 6 7 9 11
Max Temp (°C) 29 29 27 23 18 14 15 17 19 22 26 28
Min Temp (°F) 54 52 48 45 41 37 37 39 43 45 48 52
Max Temp (°F) 84 84 81 73 64 57 59 63 66 72 79 82
Table 1. Weather Metrics of Chile
(www.wordtravels.com/Travelguide/Countries/Chile/Climate/, 2007)
There are three main environmental issues facing Chile, i) air pollution in Santiago, ii)
mining, and iii) fuel mix and carbon emissions from power generation. The 5 million inhabitants
of Santiago, Chile are exposed to high levels of air pollution during a significant portion of the
year. Santiago ranks as one of the most polluted cities in the world and frequently confronts air-
20
quality alerts and pollution emergencies. Sra. Ana Lya Uriante, as shown in Figure 4, is the
government representative to address the environmental problems of Chile and find a solution.
Figure 4. Physical Environment Link Analysis
The high levels of air pollution in Santiago results in damaging respiratory diseases and a
large number of premature deaths. Located in central Chile, the city sits in the middle of a valley
and is surrounded by two mountain ranges: the Andes Mountains and the Cordillera de la Costa.
Because of Santiago's unique geographic location and weather patterns, ventilation and
dispersion of air pollutants within the valley are restricted; thus explaining why Santiago, with
emission levels similar to those in other cities, suffers from such high atmospheric pollution
levels. The carbon emissions are largely attributed to economic progression as shown in Table 2.
The pollution problem is further exacerbated in winter when wind and rainfall levels are at their
seasonal lowest (www.eia.doe.gov/emeu/cabs/chilenv.html)
21
Table 2. Chilean GDP vs. Carbon Emissions
Chile is the world's largest producer of copper, and industrial emissions in Santiago
primarily arise from the mining sector and smelter operations. The process of mining contributes
a considerable amount of pollutants to both the air and water; chief pollutants include sulfur
dioxide, arsenic and suspended particulate matter. The smelting process of copper ore alone
emits alarming amounts of arsenic and carbon monoxide into the air and water around the mines.
The most threatened areas are those in the northern part of Chile, which holds the largest copper
mine in the world -- Chuquicamata. CODELCO, the state-owned corporation which oversees the
country's copper mining sector, had to shut down Chuquicamata for an entire month in 1994 as a
result of environmental violations due to excessive fumes from the mine
(www.eia.doe.gov/emeu/cabs/chilenv.html).
Hydropower from westward flowing rivers from the Andes Mountains has historically
been Chile's single largest electricity source, at times comprising over half of the country's
installed electric generation capacity. Coal has often served as a backup in instances of drought.
Currently, the country is continuing to develop its fuel mix by increasing investment in
22
hydroelectric facilities as well as building a sizable infrastructure for the importation of natural
gas (www.eia.doe.gov/emeu/cabs/chilenv.html).
Table 3. Chilean GDP vs. Energy Consumption
Chile's rapidly growing economy has come at a significant cost to the environment. With
total energy demand expected to continue to grow by 7% annually, and air pollution in Santiago
already reaching critical levels, the continuing evolution of Chile's fuel mix away from
petroleum and coal and towards natural gas and hydroelectric generation is key to the country's
environmental future as shown in Table 3. The challenge in the years ahead will be to find a
balance between meeting Chile's growing energy needs and strengthening the country's
commitment to environmental protection (www.eia.doe.gov/emeu/cabs/chilenv.html, 2007;
Olivos Salinas, 2002).
Relation to Thesis
The Physical environment indirectly relates to my thesis by showing the historical
inaccessibility of the country to the majority of Spanish conquistadores, therefore setting
conditions for the current social, economic, and political success of Chile, which have prospered
23
as a byproduct of the Chilean bureaucracy, as dawdling and measured as it is. Also because of
its dependence on copper exports it’s economy only until recently was not very diversified. This
caused a spread of the effects from the Great Depression in the United States in the 1930 when
imports from the US fell to a comparative 20%. The stalling economy had to support Chilean
society and one way to do that was to raise the government budget and create menial jobs in the
civil service sector, aka, bureaucracy.
The Social System of Chile
Chileans have a remarkable facility for forming organizations and associations. This
propensity perhaps has something to do with the fact that for more than three centuries both the
Spanish-Chilean and the indigenous components of the country led a precarious life of conflict
with each other, a situation that forced people to rely more than usual on collective organizing,
especially, as was the case for both sides, given the weakness of the state. In contrast to North
Americans, however, Chileans usually take a formal approach to creating organizations. In
addition to electing a president, a treasurer, a secretary, and perhaps a few officers, they prefer to
discuss and approve a statement of purpose and some statutes. This is a ritual even for
organizations that need not register legally, obtaining what is called a "juridical personality" that
will enable them to open bank accounts and to buy and sell properties. It is not known for certain
where and how this formalism originated; it perhaps could be traced back to the densely
legalistic approach adopted by Spain toward the governance of its faraway colonies and to the
legalism of Roman Catholic canonical law, which applied to many aspects of society. Whatever
grain of truth there is to these speculations, observers of Chilean society are rapidly struck by the
density of its organizational life and the relatively high degree of continuity of its organizations
24
and associations. In any Chilean community of appreciable size can be found sports clubs,
mothers' clubs, neighborhood associations, parent centers linked to schools, church-related
organizations, youth groups, and cultural clubs, as well as Masonic lodges and Rotary and Lions'
clubs. Virtually all of the nation's fire fighters are volunteers, with the exception of members of a
few fire departments in the largest cities. Government statistics greatly understate the number of
community organizations because they refer mainly to those having some contact with one or
another state office. According to the official estimate for 1991, there were about 22,000 such
organizations, the main ones being sports clubs (6,939), neighborhood councils (6,289), mothers'
clubs (4,243), and parent centers (1,362). Government publications do not report membership
figures for these organizations. Most of the important urban areas in Chile also include a broad
sample of the local chapters of a wide variety of occupational associations. These include labor
unions and federations, public employee and health worker organizations, business and
employers' associations, and professional societies of teachers, lawyers, doctors, engineers,
dentists, nurses, social workers, and other occupational groups (www.countrystudies.us).
The various associations also make their views known to state or congressional officials
when issues of policy that affect them are debated. Some associations traditionally have been
identified with particular political parties. Many of the most militant party members have also
been active in social organizations. In addition, party headquarters in local communities often
have served as meeting places for all kinds of activities. The Radical clubs of small towns in the
central south are especially active, often sponsoring sports clubs as well as the formation of fire
departments. Chilean social life also has definite subcultures, with the main lines of cleavage
being proximity to or distance from the Roman Catholic Church and social class. The schools
that parents select for their children closely reflect these sub-cultural divisions. The latter are also
25
strongly mirrored in associational life, as Chileans tend to channel their sports and leisure
activities into organizations within their subculture. Schools, churches, and unions contribute to
this pattern by being foci for such organizing. In addition, there are some clubs and centers
related to specific ethnicities, such as Arab, Italian, or Spanish clubs, even though, as noted
previously, such identities traditionally have been much less salient than religion and class.
Occupational associations have been an important component of class and social status identities
in Chilean society, with most of them affiliating people of like occupations regardless of their
religious identities or preferences. Although this has helped diminish the significance of
religiously based identities, the leadership divisions and conflicts within the nation's associations
can often be traced back to those sub-cultural differences. People's political preferences follow
the sub-cultural lines of cleavage as well in most cases. Social organizations did not fare well
under the military government. Those that were perceived to be linked, however loosely, to the
parties of the left were subjected to sometimes severe repressive measures. Most associations,
including those of business groups, were hardly ever consulted on policy matters, and, in the
absence of normal democratic channels for exerting influence, they found their opinions and
petitions falling on deaf ears. Eventually, the most prominent social organizations joined in
voicing their discontent with the military government through what was called the Assembly of
Civility (Asamblea de la Civilidad), and their efforts contributed to the defeat of President
Augusto Pinochet Ugarte (1973-90) in the 1988 plebiscite. The only organizations that thrived
under the military government were the women's aid and mothers' clubs, which were supported
by government largesse and headed at the national level by Pinochet's wife, Lucía Hiriart. With
the return to democracy, social organizations recovered the ability to pressure Congress and the
national government. The new government opted for explicit solicitation of the opinions of
26
important interest associations on some of the policies it was considering. It also fostered
negotiations between top labor and business leaders over issues such as labor law reforms,
minimum wage and pension levels, and overall wage increases for public employees. These
negotiations led to several national agreements between state officials and business and labor
leaders, thereby inaugurating a new form of top-level bargaining previously unknown in Chile
(www.countrystudies.us). Figure 5 shows how the aforementioned social organizations tie in to
the government agencies responsible for maintaining and promoting social order.
Figure 5. Chilean Society Link Analysis
Chilean society has been influenced by western culture in recent years, especially with
regards to education, the economy, and how people, communities, and cities desire a certain
standard of living and how they prioritize basic services to meet those desires, specifically for the
27
school age and young adult Chilean population. Education and Employment are extremely
important in Chilean culture. Class and caste does matter in Chilean society to some degree but
most Chileans agree that if you study and work hard you can be anything you desire to be. The
lack of support to these two supporting social systems causes more public unrest and “bad PR”
for the Chilean Government than any other. Even the recent rise in petty crime is seen as part of
“normal life” by the majority of the population.
During the last two years there have been several large public demonstrations by primary
school age children concerned with the public education system in the capital, Santiago de Chile.
Children blocked streets, broke windows, caused traffic accidents, etc., to get the attention of the
Chilean, regional, and international media to put pressure on the President of Chile, not her
Education Minister, but the President to take action. Here in the US it would be very, very rare
for the President of the United States to address the nation on how he or she is personally going
to produce a plan to ensure that schools will get the textbooks they need, the heaters work, the
bathrooms are clean and functional, and the public transportation will be there to pick kids up in
the morning and take them home in the afternoon. The parents of the school age children were
also so upset with the school systems that they encouraged their children to take their frustration
to the streets. This posed an unusual problem for law enforcement personnel who would
normally put on their riot gear and turn on the fire hoses and launch tear gas at adult protestors,
but these were children. Some of them were as young as 11 years old. There was really no way
to force them off the streets. TV Chile (TVN) news crews showed the Carabineros protecting
stores and trying to clear the streets to allow traffic to flow, but the effect was similar to
sweeping water out of a puddle; it just ran back in. The President of Chile had to address the
nation several times during the course of two weeks to plead with parents to stop sending their
28
kids out into the street to protest. Only after an approx. $3,500,000 US in public education
funding was voted into law by the Senate did the parents keep their kids of the streets of Santiago
and end the protests. Chilean youth feel they are entitled to a good primary and college
education. This should be supported by our government as necessary to help build a smarter,
more professional workforce to maintain strong economic ties with the country.
Recently the Chilean government completed a complete overhaul of the public
transportation system in Santiago. “Transantiago” was hailed as the end to the public
transportation problems in Santiago and a step in the right direction to reducing the amount of air
pollution caused by the nearly 6 million inhabitants of the Santiago Metropolitan area. The new
low-pollution hybrid buses and routes synchronized with the metro rails, started running in
March 2007. Part of this plan was a raise in the cost of public transportation. Buses increased
from 350 CLP ($0.60) to 850 CLP ($1.45.) Most of the citizens of Santiago were optimistic
about the new system and saw the increase in price as necessary for a newer, better means of
transportation. However, after 90 days the optimism turned to anger and frustration. Before the
new system was started a man living in the La Florida suburb of Santiago would have to ride a
bus approx 45 minutes to get to downtown Santiago. Now he has to pay more than twice as
much, ride 90 minutes, and buy his bus tickets at a central station whereas before he could pay
cash at the bus. One of the problems is that the buses were replaced one for one, but the number
of stops along the route increased by almost double. Now people have to get up earlier, pay
more, and get home later with this “new and improved” system. Hourly-wage employers are
reporting a loss in productivity due to the increase in time in the employees’ work day. Plus add
the frustration of feeling “tricked” by your government into making a bad situation worse. The
majority of the population of Santiago sees the political elite drafting new legislation that does
29
not affect them, and puts more money in the government coffers, because they do not use the
public transportation system. Employment in Chilean society sets it apart from other South
American countries, historically and recently. There was never any slave labor imported to Chile
during or after the colonial periods. Chileans have always worked their own land and extracted
their own natural resources. The work climate is professional and proud. Similar to public
education, our government should support the expanding economy and build closer ties to the
Chilean Government as an economic ally in the region.
Relation to Thesis
Chileans “remarkable facility for forming organizations and associations” sets conditions for
bureaucracy to grow and spread from social associations and organizations into economics and
politics. Chileans formal approach to creating organizations, i.e., “electing a president, a
treasurer, a secretary, and perhaps a few officers” show they prefer to interact with each other
with "juridical personality” and “legalistic approach.” The relatively high degree of continuity
of its organizations and associations is explained best by Chilean author Isabel Allende in a
passage of her book My Invented Country: a Nostalgic Journey through Chile:
Love for regulations, however unworkable they may be, finds its best exponents in the
enormous bureaucracy of our suffering country. The bureaucracy is the paradise of the
people in their uniform gray suits. There such a person can vegetate to his pleasure,
completely safe from the traps of imagination, perfectly secure in his post to the day he
retires—unless he is imprudent enough to try to change things, an observation made by
the author-sociologist Pablo Huneeus (who is, I might add in passing, one of the few
eccentric Chileans who isn’t related to my family). A public official must understand
from his first day in office that any show of initiative will signal the end of his career
30
because he isn’t there to be meritorious but to reach his level of incompetence with
dignity. The point of moving papers with seals and stamps from one perusal to the next is
not to resolve problems, but to obstruct solutions. If the problems were resolved, the
bureaucracy would lose power and many honest people would be left without
employment; on the other hand, if things get worse, the state increases the budget and
hires more people, and thus lowers the index of the unemployed. Everyone is happy. The
official abuses every smidgen of his power, starting from the premise that the public is
the enemy, a sentiment that is fully reciprocated. It was a shock to find that in the United
States all that’s needed to move about the country is a driver’s license, and that most
transactions can be accomplished by mail. In Chile, the clerk on duty demands that the
poor petitioner produce proof that he was born, that he isn’t a criminal, that he paid his
taxes, that he registered to vote, and that he’s still alive, because even if he throws a
tantrum to prove that he isn’t dead, he is obliged to present a “certificate of survival.”
The problem has reached such proportions that the government itself has created an
office to combat bureaucracy. Citizens may now complain of being shabbily treated and
may file charges against incompetent officials…on a form requiring a seal and three
copies, of course.
This passage is one of many in her book touting her displeasure with the many forms of
bureaucracy in Chile. The aforementioned author-sociologist Pablo Huneeus also writes about
Chilean bureaucracy in op-ed columns in Chilean periodicals. They are widely popular by
citizens and politicians alike. The social system has built a strong foundation for the
administration, rules and regulations, and formalities of Chilean life.
31
Figure 6. Chilean Road Network
The Infrastructure and Technology System
Chile has become a model for South American
countries through stable governance, privatization, and
foreign investment. Chile is regarded by the World Bank,
International Monetary fund, and other International
organizations as the most technologically advanced country
in South America with modern roads, over 3 million
internet users, and 12 million mobile phone users among a
national population of 15 million (www.opensource.gov).
However, Chile does have its challenges 1) in maintaining
domestic infrastructure and, 2) improving infrastructure
with the associated technology to increase regional and
international trade and investment. Because of its unique
geographic isolation, Chile's infrastructure essentially
cannot be shared with neighboring countries, and its system
of highways and roads are purely national in scope.
Through the Regional Infrastructure Integration in South
America (IIRSA) initiative, launched in 2000, Chile is
working with twelve other South American countries to
develop a network of transport corridors -using road and rail
infrastructure as well as rivers- across the region. In
addition to benefiting Chilean exporters to Argentina and
32
Brazil, this initiative will facilitate the use of Chilean ports for exports from other South
American countries to Asia. IIRSA envisages ten bi-oceanic corridors, of which four pass
through Chile shown in Figure 6.
Figure 7. Regional Infrastructure Projects
Public and private partnerships in Chile are essential to building domestic infrastructure
with national and international application. Since the mid-1990’s, when Chile launched its
Build-Operate-Transfer (BOT) concessions program, the private sector has participated actively
in the development of public infrastructure. These public-private partnerships have not only
33
delivered rapid progress in an area that could otherwise have become a bottleneck for Chile’s
economic expansion but have, at the same time, freed fiscal resources for other social priorities,
while opening up new opportunities for foreign and local investors(http://www.ddg.com.)
Chile’s economic and political stability is identified as a key factor in the success of these
partnerships under which investors recoup their outlay over periods of up to thirty years. In view
of the positive results of these contracts -in which, as well as local companies, some 25 overseas
firms are participating- the concessions program has now been extended to new areas, including
agricultural irrigation projects and the construction of new prisons
(http://www.foreigninvestment.cl). The biggest challenge to foreign investment is the Chilean
government itself. Numerous Cabinet Ministers, national micro-management, and corruption all
create unnecessary red-tape for large MNCs to invest capital in the infrastructure of Chile.
Figure 8. Link Analysis of Chilean Infrastructure and Technology
34
Relation to Thesis
Chile’s infrastructure and technology system is advanced compared to the rest of the
region and does not share many of the same political, economic, and social problems. The roads
are paved and well built, the phones work, televisions across the nation can tune in to the same
channels despite the countries enormous length north to south, and its ports are the most
developed in South America. The national control of resources and decision-making in policy
decisions of the regions add unnecessary layers to the national government. Regional
government elections with regional representation to the national government would eliminate
the need for decisions about Antofagasta being made in Santiago. The infrastructure and
technology system is also a mechanism to employ the information system, the best weapon
against red tape and official procedure in Chile and will be discussed later in this paper.
Economic System
The economy of Chile is a model of success and free-market capitalism in the region.
Few countries in the world have been whipsawed as violently from one political or economic
extreme to another as Chile (Buckman 2006, pg. 107.) Chile’s economy enjoyed a remarkable
boom in the early 1990s, the result of a comprehensive transformation that began in 1974 with
the adoption of free-market economic policies. Between the 1930s and the early 1970s, the
Chilean economy was one of the most state oriented economies in Latin America. For decades, it
was dominated by the philosophy of import-substitution industrialization. Heavily subsidized by
the government, a largely inefficient industrial sector had developed. The sector's main
characteristics were a low rate of job creation, a virtual absence of nontraditional exports, and
35
Figure 9. Chilean Economic System Map
a general lack of growth and
development. In the early 1970s, the
ruling socialist-communist Popular
Unity (Unidad Popular--UP) coalition
of President Salvador Allende Gossens
(1970-73) attempted to implement a
socialist economic system. The Allende
experiment came to an end with the
military coup of September 11, 1973.
From that point on, Chile's economic
policies took
a radical turn, as the military
government undertook, first timidly and
later more confidently, deep reforms
aimed at creating a market economy
(www.countrystudies.us.) Figure 9
shows how the Economy (agriculture,
mining, and industry) of Chile is spread
across the Physical Environment.
Chile is the world’s largest
exporter of copper and its economy is
largely dependant on that industry.
36
CODELCO, the state-run copper company, reported exports of $56 Billion US last year, 12%
higher than 2005 (www.economia.cl.) Apart from the large copper industry Chile in recent years
has been successful in diversifying its domestic and international economy.
The northern regions of Chile are dependant on fishing, mining, and international trade
routes from Peru and Bolivia to the port cities of Arica and Antofagasta. Further south towards
Valparaiso the wine vineyards, smelting facilities, and cement factories dominate the economic
terrain. The Metropolitan Region with Santiago is the business capital of Chile, and soon to be
South America, with offices of over 145 multinational corporations investing in the Chilean
economy (www.financia.cl.) The southern regions of Chile are large exporters of fruits and
vegetables during the northern hemisphere’s winter months. And the southern tip of Chile is
largely supported by hydrocarbon exploration, eco-tourism and international trade through the
Strait of Magellan. The resulting economic blueprint is as diverse as the geographic composition
of the long, slim nation. The chart below shows some of Chile’s economic statistics from the
CIA World Factbook (www.cia.gov.)
GDP
(purchasing $202.7 billion (2006 est.)
power parity):
GDP (official
exchange rate): $111.8 billion (2006)
GDP - real
growth rate: 4.2% (2006 est.)
GDP - per
capita (PPP): $12,700 (2006 est.)
GDP - agriculture: 5.9%
composition by industry: 49.3%
sector: services: 44.7% (2006 est.)
Labor force: 6.94 million (2006 est.)
Labor force - by agriculture: 13.6%
occupation: industry: 23.4%
37
services: 63% (2003)

Unemployment
rate: 7.8% (2006)
Population
below poverty 18.2% (2005)
Household
income or lowest 10%: 1.2%
consumption highest 10%: 47% (2000)
by percentage
share:
Gini index: 53.8 (2003)
Inflation rate
(consumer 2.6% (2006)
prices):
Investment
(gross fixed): 21% of GDP (2006 est.)
Budget: revenues: $36.71 billion
expenditures: $26.68 billion; including capital expenditures of $3.33 billion
(2006 est.)
Table 4. Chilean Economic System Metrics
Chile is commonly portrayed as the great exception to Latin America's long and difficult
struggle to overcome economic backwardness and instability. In 1982, conservative economist
Milton Friedman of the University of Chicago pronounced the market-driven policies of Gen.
Augusto Pinochet's military dictatorship "an economic miracle." Friedman was hardly an
impartial observer. He and other Chicago economists had trained many of the dictatorship's
ultra-free-market economic advisors, a group of Chilean economists who became known as the
"Chicago Boys." Deeply involved in the preparation of the coup of 1973, they convinced the
generals that they were prepared to supplement the brutality, which the military possessed, with
the intellectual assets it lacked. The US Senate Select Committee on Intelligence has disclosed
that 'CIA collaborators' helped plan the economic measures that Chile's junta enacted
immediately after seizing power. Committee witnesses maintain that some of the 'Chicago boys'
38
received CIA funds for such research efforts as a 300-page economic blueprint that was given to
military leaders before the coup. It is therefore understandable that after seizing power they were,
as the Wall Street Journal put it, 'champing to be unleashed' on the Chilean economy. Their first
approach to the situation was gradual; only after a year of relative confusion did they decide to
implement without major modification the theoretical model they have been taught at Chicago.
The occasion merited a visit to Chile by Mr. Friedman himself who, along with his associate,
Professor Harberger, made a series of well-publicized appearances to promote a 'shock treatment'
for the Chilean economy -something that Friedman emphatically described as 'the only medicine.
Absolutely. There is no other. There is no other long-term solution.' These are the basic
principles of the economic model offered by Friedman and his followers and adopted by the
Chilean junta: that the only possible framework for economic development is one within which
the private sector can freely operate; the private enterprise is the most efficient form of economic
organization, and that, therefore, the private sector should be the predominant factor in the
economy. Prices should fluctuate freely in accordance with the laws of competition
(http://www.tni.org.)
Other prominent U.S. economists, however, also tout Chile's "economic miracle." In
2000, Harvard economist Robert Barro asserted in Business Week that Chile's "outstanding
performance derived from the free-market reforms instituted by ... Pinochet." Even Nobel
laureate Joseph Stiglitz, a strong critic of the Chicago School, described Chile in his 2002 book
Globalization and its Discontents as an exception to the failure of unregulated free markets and
free trade policies in developing nations. Neoliberalism, a term first employed in Latin America,
describes the experiment in unregulated capitalism that the Pinochet dictatorship embraced in the
years following the 1973 coup that toppled the elected government of Socialist President
39
Salvador Allende. Chile has seen three elected governments since Pinochet's fall in 1990. None,
however, including the present Socialist-led government, has broken sharply with the neoliberal
economic model instituted by the dictatorship. For years, these post-Pinochet Concertación
governments (a coalition of the Christian Democratic and Socialist parties) were content to
administer the economic boom that had begun in the latter years of the dictatorship
(http://dollarsandsense.org.)
Figure 10. Link Analysis of the Chilean Economic System
During the early 1990s, Chile's reputation as a role model for economic reform was
strengthened when the democratic government of Patricio AYLWIN - which took over from the
40
military in 1990 - deepened the economic reform initiated by the military government. Growth in
real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight
monetary policies implemented to keep the current account deficit in check and because of lower
export earnings - the latter a product of the global financial crisis. A severe drought exacerbated
the recession in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity
rationing, and Chile experienced negative economic growth for the first time in more than 15
years. Despite the effects of the recession, Chile maintained its reputation for strong financial
institutions and sound policy that have given it the strongest sovereign bond rating in South
America. Between 2000 and 2006 growth ranged between 2%-6%. Throughout these years Chile
maintained a low rate of inflation with GDP growth coming from high copper prices, solid
export earnings (particularly forestry, fishing, and mining), and growing domestic consumption.
Chile continues to attract foreign direct investment, but most foreign investment goes into gas,
water, electricity and mining. Unemployment has exhibited a downward trend over the past year,
dropping to 7.8% at the end of 2006. Chile deepened its longstanding commitment to trade
liberalization with the signing of a free trade agreement with the US, which took effect on 1
January 2004. Chile signed or ratified a number of trade agreements in 2006, including with
China and India. Chile claims to have more bilateral or regional trade agreements than any other
country. It has 57 such agreements (not all of them full free trade agreements), including with the
European Union, Mercosur, South Korea, and Mexico (www.cia.gov.)
Relation to Thesis
It is hard to imagine Chile turning away from its free-market, free-trade orientation. The
economic system of Chile is as modern, connected, and complicated as that of the US and
Europe and is one of the winners in globalization. Unfortunately, the legacy of the dictatorship
41
still lingers over Chilean public opinion and political discourse and the US intervention,
particularly the Chicago Boys with the help of the CIA, into the economic planning of the
country stir ideas of pre-planned schemes for US markets to monopolize the import-dependent
economy.
The bureaucracy of Chile must in part a result of the economic system as it was laid out
by General Pinochet and the Chicago Boys with CIA assistance after the coup of 1973. It’s
unclear if the current bureaucratic environment was in place prior to the coup. Personal contacts
in Santiago de Chile couldn’t confirm if the current level of “government control” as they call it
was in place a generation ago. They do affirm that the level of bureaucracy is getting smaller do
to government efforts. According to the Index of Economic Freedom starting a business in Chile
takes an average of 27 days, compared to the world average of 48 days. Entrepreneurship should
be easier for maximum job creation. Obtaining a business license is relatively simple, but closing
a business can be difficult. The time and cost of going through bankruptcy can be burdensome.
The overall freedom to start, operate, and close a business is relatively well protected by the
national regulatory environment (www.heritage.org).
The economic system seems to have been shielded somewhat from the spread of
bureaucracy. It seems counter-intuitive and presents suspicions of low to moderate levels of
corruption and coercion in order to start and maintain business. If things are so difficult for an
ordinary citizen to get a drivers license or a copy of property deeds, wouldn’t it be harder for a
small, medium, or large business to get permits and authorizations? A case study by George
Ludowici cites challenges to establishing a business in Chile:
• bureaucracy levels in Chile are high;
• Keeping up with business developments/trends
42
- We lean on our Chilean business partner and use
- Some hierarchical issues and protocols to be observed and sometimes getting
from point A to point B just is not possible. You have to obey the local rules.
- Chileans still work on values such as saving face and as is common in Asian
countries have an aversion to saying “no” in certain situations (Jose_Blanco@sch-
blanco.com).
Even though the economic freedom index in Chile is above the international average there
are still speed bumps to an efficient way of creating industry. You may not be told “no,” but
you will definitely spend a lot of time and resources, including “under the table”
negotiations, getting someone to say “yes.”
Information System
Two parallel forces, local politics and the globalization of media markets, shaped the
development of Latin American media in the 1990s. Under various different circumstances
technological changes and the emergence of the global market were the key factors in the
development of the media of Latin America. Under other circumstances it was local politics that
determined the course of ownership and content. At the cusp of a new century and in the
aftermath of substantial political and economic change in the 1980s and 1990s, it is time to take a
look at how local politics and media globalization shaped the recent evolution of the media in the
region. The consolidation of democracy coupled with the adoption of neoliberal economic
policies introduced important transformations across the region (Fox and Waisbord 2002, pg. ix.)
Chile in particular has seen the Latin American Media start in their country in 1827 with El
Mercurio newspaper to all liberal media being closed under the Pinochet regime immediately
after the coup 151 years later to now with over 225 privately owned media outlets composed of
43
print, radio, terrestrial, cable, and satellite TV, and one of the most developed internet systems in
South America.
Chile has a long tradition of an active press, closely tied to the country's competitive
political parties. Prior to the 1973 coup, Santiago had ten daily newspapers spanning the
ideological spectrum. These included, on the left, the Communist El Siglo, the Socialist Ultima
Hora, and the far-left papers Puro Chile and Clarín. The Christian Democrats owned La Prensa.
Newspapers identified with the center-right or far right included El Mercurio (founded in 1827),
Las Ultimas Noticias (founded in 1902), La Segunda (founded in 1931), La Tercera de la Hora
(founded in 1950), and La Tribuna (www.worldpress.org.).
The wide ideological range of Chile's major newspapers did not mean that circulation
was evenly distributed. All of the newspapers supporting the Allende government had a
combined circulation of less than 250,000, while, for instance, La Tercera de la Hora, a center-
right paper, had a circulation of 200,000. By far the most important newspaper in Chile has been
El Mercurio, with a Sunday circulation of 340,000 and wide influence in opinion circles. The El
Mercurio Company, easily the most powerful newspaper group in Chile, also owns La Segunda,
the sensationalist Las Ultimas Noticias, and regional papers. With its close ties to the Navy of
Chile (Armada de Chile), El Mercurio played a critical role in mobilizing support against the
Allende government, openly supporting the military coup (www.worldpress.org.).
After the coup, Chile's independent press disappeared. The papers of the left were closed
immediately, and the centrist La Prensa stopped publishing a few months later. Newspapers that
kept publishing strongly supported the military government and submitted to its guidelines on
sensitive issues; they also developed a keen sense of when to censor themselves. The print media
became even more concentrated in the hands of two groups: the Edwards family, owners of El
44
Mercurio, with approximately 50 percent of all circulation nationwide, and the Picó Cañas
family, owners of La Tercera de la Hora, with another 30 percent. Only toward the end of the
military government did two opposition newspapers appear--La Época, founded in 1987 and run
by Christian Democrats, and Fortín Mapocho, a publication run by groups on the left that
became a daily newspaper in 1987. By 1990 Chile had approximately eighty newspapers,
including thirty three dailies (www.worldpress.org.).
During the years of military rule, opposition opinion was reflected in limited-circulation
weekly magazines, the first being Mensaje, a Jesuit publication founded in 1951. Over time,
magazines such as Hoy, a Christian Democratic weekly started in 1977; Análisis and Apsi, two
leftist publications that began reaching a national audience in 1983; and the fortnightly Cauce,
established in 1983, all circulated under the often realized threat of censorship, confiscation of
their publications, and arrests of reporters and staff. In perhaps the worst case of government
suppression, Cauce, Apsi, Análisis, and Fortín Mapocho were all shut down from October 1984
to May 1985. After the restoration of democracy, two conservative weekly magazines were
founded that were opposed to the Aylwin government were the influential ¿Qué Pasa? (founded
in 1971) and Ercilla (begun in 1936). By 1990 Chile had more than twenty major current affairs
periodicals (www.worldpress.org.).
The return of civilian government did not lead to an explosion of new publications. Both
Época and Fortín Mapocho, which had received some support from foreign sources, faced
enormous financial challenges in competing with the established media. Fortín folded, and
Época finally was sold to a business group, which retained the paper's standards of objective
reporting. El Mercurio continued to dominate the print medium and remained the most
influential newspaper in the country. The El Mercurio Company remained closely tied to
45
business groups that had supported the military regime but made efforts, particularly through La
Segunda, to present balanced and fair reporting. The only openly pro-CPD newspaper in Chile
was the government-subsidized financial paper, La Nación, which reflected the views of the
authorities (www.worldpress.org.)
Santiago’s half-dozen dailies are the third-most important news source in absolute
numbers but offer greater depth. Income and gender are important factors: While 300,000 of the
richest residents of Santiago read the conservative broadsheet El Mercurio (out of a total
readership of some 1 million); only 5,000 people in the lowest socioeconomic sector do so. They
prefer the scandal-oriented tabloid La Cuarta, read by 325,000 low-income people, three-
quarters of its audience. These figures represent total readership, not press runs. Given the
country’s wage levels, a purchased newspaper passes through many hands. The free daily, MTG,
given away at Metro stations in the morning rush hour, has edged up to fifth place, with 390,000
readers. While 77 percent of men in Santiago read a newspaper at least once a week, among
women the figure falls to 63 percent (www.worldpress.org.)
Radio traditionally has been dominated by pro-government stations, the most notable
exceptions being Radio Cooperativa, run by Christian Democrats, and Radio Chilena, run by the
Roman Catholic Church. At first the size of the audience for these two stations did not approach
the listenership levels of Minería, Portales, and Agricultura--stations identified with the business
community. Radio Tierra, claiming to be the first all-women radio station in the Americas, had
identified exclusively with women since its establishment in 1983. Although the opposition had
some print outlets, it had no access to television. Although the Association of Radio Owners
boasts that 88 percent of residents listen to the radio each day, a recent market survey places that
figure at closer to 65 percent. Most radio news programs are comprised of quick headlines
46
interspersed among musical offerings. The most important radio station for news, Cooperativa,
has a daily audience of some 210,000 listeners, followed by Radio Chilena at about half that
figure (www.worldpress.org.).
Not until 1987, in the months leading up to the plebiscite, did opposition leaders gain
limited access to television. The medium was strictly controlled by the authorities and by
network managers: the University of Chile, the Pontifical Catholic University of Chile, and the
National Television Network of Chile--Channel 7 (Televisión Nacional de Chile--Canal 7).
Competitive politics transformed television news broadcasting, introducing numerous talk shows
that focus on politics. Channel 7, the official station of the military government, was reorganized
by the junta after Pinochet's defeat as a more autonomous entity presenting a broad range of
views and striving for more impartial news presentation. The station with the widest audience in
Chile in the early 1990s was the Pontifical Catholic University of Chile's Channel 13, offering a
right-of-center editorial line. Other channels with a more regional focus included Channel 5 of
Valparaíso, operated by the Catholic University of Valparaíso (Televisión Universidad Católica
de Valparaíso--Canal 5); Channel 11, operated in Santiago by the University of Chile
(Corporación de Televisión de la Universidad de Chile--Canal 11); and two commercial
channels, Valparaíso's Channel 4 and Santiago's Red Televisiva Megavisión--Channel 9, owned
by the Pinto Claude Group and directed by Ricardo Claro. In May 1993, the Luksic Group
entered the private television market by acquiring a 75 percent share of Maxivisión (TV MAX),
broadcast by microwave on UHF (ultrahigh frequency) in the Metropolitan Region of Santiago
(www.countrystudies.us.)
The National Council of Television (Consejo Nacional de Televisión) was charged with
regulating the airwaves and setting broadcast standards. Its jurisdiction in matters of censorship
47
was unclear in the wake of Supreme Court rulings challenging its decisions
(www.countrystudies.us.) Most Chileans learn about themselves and the world through
television. In the capital city of Santiago, daily audiences for TV news reach approximately 2.4
million viewers, according to market research. Although that figure equals about 70 percent of
the city’s total population 15 or older, some are repeat viewers who catch more than one of the
four daily broadcasts: morning, lunch hour, p.m. and midnight. Figure 11 shows some of the
many ways in Chileans get there information from TV, Radio, Newspapers, or Magazines. Sr.
Rene Cortazar is the government representative in planning for the continued development of
dissemination mediums for national and international information.
Figure 11. Link Analysis of the Chilean Information System
Some 40 percent of Chile’s 14.5 million inhabitants live in the Santiago metro area, one
of the highest concentrations in the world for a capital city. About a million santiaguinos watch
48
an evening newscast around 8:30 or 9:00 p.m., but a surprisingly large number-more than
600,000-tune in for the midnight wrap-up. The morning shows have the lightest audiences,
which may reflect the long commutes to their jobs residents face. Three of the five local TV
stations don’t even put on a morning news show (www.worldpress.org.) The largest television
market is the evening telenovelas and reality shows on Canal 13, Canal 11, Canal 9, and Canal 7.
The largest ratings and most expensive advertising time occurs during 2100 to 2300 local time
during the airing of the telenovelas, reality shows, and evening celebrity talk shows. Most
Chileans see the characters in the TV shows as the example or “standard” by which to conduct
themselves socially, professionally, and financially. The shows are well written and performed
by talented actors by Hollywood standards. Many Chileans are turning to the Internet web pages
of their favorite newspaper and TV stations to get their information.
The Internet has spread across Chile like wildfire, largely due to the expansion of Chile’s
university system. As universities have been built in the regional capitals the local community
has taken advantage of the improved information infrastructure that comes with the university to
improve internet access and bandwidth. As shown Figure 12 the internet backbone is well
developed from North to South stopping at the city of Puerto Montt due to the inaccessible
terrain of the Artic archipelago and Patagonia. However, recent legislation and funding from the
Ministry of Planning will provide fiber optic cable to the area between Puerto Montt and Punta
Arenas to connect the rest of the country. The projected completion of this project is the end of
2010 (www.santiago.cl.) Once this project is completed, and the bandwidth to the very south of
the country, and possibly to Antarctica, is tuned to a sufficient level, the potential for investment
by domestic and foreign corporations will be greatly increased.
49
Figure 12. Chilean Internet Backbone Map
50
Figure 13. Chilean GSM Subscriber Map
GSM Phone subscribers in Chile number at around
10,500,000 in 2006 out of a population of 16,000,000
(www.cia/worldfactbook.gov.) Cell phones outnumber
landlines by four to one. This is not due to a lack of
landline phone service, but out of the large cell phone
market with competitive pricing, good service, and popular
phones. GSM coverage in the country is concentrated
around the population centers and is illustrated to the right
in Figure 13 (www.coveragemaps.com). Chilean Cell
Phone companies such as Telefonica Movil and Movistar
have international roaming agreements in the region and
with large telecom companies throughout the world.
Relation to Thesis
A free press demands transparency and
accountability from the government, corporations, and
social institutions (sports, education, and religion.) A Chile
with a censored press would enable thicker levels of
bureaucracy with no way of examination by media outlets
to broadcast the truth to the public. The US government
should continue to support information system
development in Chile as a model for its less developed
neighbors in Peru and Bolivia. An extensive media
assessment should be conducted to create a blueprint for success to pass to developing countries
51
in the region. Authors like Isabel Allende are critical for telling the story of just how bad things
can get in a country of officialdom, formalities, and paperwork. Chileans using the internet can
look at US websites to see just how easy it can be to renew your vehicle registration online or
order birth certificates and college transcripts with the touch of a mouse button, instead of
waiting in line for hours as shown in Figure 14. This will lead to questions to their local
government as to why the same system isn’t used in Chile followed by demands that it is.
The Political System and Bureaucracy of Chile
Figure 14. Chilean Political Cartoon depicting bureaucracy at the local Registro Civil
One definition of bureaucracy is the political rule of offices. In democratic systems,
however, administrative offices should not have any political power; they merely should be
executors of legal rules. In practice, interpretation and execution of the rules leads to informal
influence. Bureaucracy frequently becomes a concept in sociology and political science
52
referring to the way that the execution and enforcement of rules are organized. According to Max
Weber, living at the top level of Prussian totalitarism, four structural concepts are central to any
definition of bureaucracy: a well-defined division of administrative labor among persons and
offices, a personnel system with consistent patterns of recruitment and stable linear careers, a
hierarchy among offices, such that the authority and status are differentially distributed among
actors, and formal and informal networks that connect organizational actors to one another
through flows of information and patterns of cooperation (www.wikipedia.com) .
Ludwig Von Mises published a book in 1943 and a subsequent edition in 1962, simply
titled Bureaucracy explaining the historical background and the arguments for and against it.
His aim was not to condemn or blame bureaucracy. It “tries to point out what bureaucratic
management of affairs means and in what it differs from profit management. It further shows in
which field bureaucratic management is the only possible method for the conduct of affairs. It
finally aims at putting into relief the effects which the attempts of contemporary governments
and political parties to substitute government action for private business have brought about and
are bound to bring about in the future.” Some of his key points cited below explain the historical
foundation of and theory behind bureaucracy and helped frame the main argument of my thesis:
There are two methods for the conduct of affairs within the frame of human
society, i.e., peaceful cooperation among men. One is bureaucratic management; the
other is profit management. It is well known that profit management is highly unpopular
in our age. People are anxious to substitute all-round planning by a central authority—
i.e., socialism—for the supremacy of the consumers as operative in the market economy.
But at the same time the same people severely blame the shortcomings of bureaucratism.
They do not see that in clamoring for the suppression of profit management they
53
themselves are asking for more and more bureaucracy, even for full bureaucratization of
every sphere of human affairs. There are areas of man’s activities in which there cannot
be any question of profit management and where bureaucratic management must prevail.
A police department cannot be operated according to the methods resorted to in the
conduct of a gainful enterprise. A bakery serves a definite number of people—its
customers—in selling them piecemeal what it has produced; it is the patronage of its
customers that provides the social legitimacy—the profitability—of the bakery’s business.
A police department cannot sell its “products”; its achievements, however
valuable, even indispensable as they may be, have no price on the market and therefore
cannot be contrasted with the total expenditure made in the endeavors to bring them
about. The terms bureaucrat, bureaucratic, and bureaucracy are clearly invectives.
Nobody calls himself a bureaucrat or his own methods of management bureaucratic.
These words are always applied with an opprobrious connotation. They always imply a
disparaging criticism of persons, institutions, or procedures. Nobody doubts that
bureaucracy is thoroughly bad and that it should not exist in a perfect world. The abusive
implication of the terms in question is not limited to America and other democratic
countries. It is a universal phenomenon.
The popular ideas of government interference with business and of socialism have
undermined the dams erected by twenty generations of Anglo-Saxons against the flood of
arbitrary rule. Many intellectuals and numerous voters organized in the pressure groups
of farming and of labor disparage the traditional American system of government as
“plutocratic” and yearn for the adoption of the Russian methods which do not accord the
individual any protection at all against the discretionary power of the authorities.
54
Chile’s political system reminds one of the scene in Monty Python’s Life of Brian when
several disenfranchised Hebrew political activists under Roman rule are talking about how the
People’s Front of Judea is better than the Judean People’s Front which is ten times better than the
Peoples Popular Front of Judea which barely comes close to the Popular Peoples Front. And
while arguing back and forth they come to the agreement that while a man cannot give birth to a
child, that doesn’t mean he shouldn’t have the right to do so. This kind of political theater is
common in Chile, and the stage is set with various parties, coalitions, and political associations.
Chile has a multi-party system with one majority coalition, the Coalition of Parties for
Democracy (Concertación de Partidos Por la Democracia), composed of the Christian Democrat
Party (PDC), Party for Democracy (PPD), Socialist Party (PS), and the Social Democrat Radical
Party (PRSD) as shown in Figure 15. The political actors of Chile are split between the left-
leaning Communist/Socialist Party and the Conservative Right Christians for Democracy Party,
with eight other national and regional political parties caught in between, plus the independents
that align with the alliances based on their own left/right political institutional idealology.
As stated in the historical background of this paper the Coalition of Parties for Democracy has
had control of the executive branch of government since the plebiscite in 1989 and has shaped
the political system as it sees fit over the last 17 years. It is easy to see where political infighting
between the executive and legislative branches can occur due to party loyalties and appointment
to certain institutions by the president. In a commonly noted definition, March and Olsen
characterize institutions as "collections of interrelated rules and routines that define appropriate
action in terms of relations between roles and situations." As such, institutions mediate between
political actors. Rules govern these relationships. The scope of action of each actor is thus well-
55
defined and fairly predictable in any given situation. If institutions are effective, then all
involved in political decision-making know the roles of all other political participants and the
manner in which those decisions will be reached and ultimately implemented (Weeks 2001.)
Figure 15. Link Analysis of the Chilean Political System
Decision making should be left to the political officials appointed to make those decisions. The
responsibility or “power” of decision making is why they are holding their position in office,
empowered by their electorate or the government official, i.e. the president that appointed them.
56
Figure 16. Current Leftist Governments of South America
Many legislators on the left in Chilean politics, mostly in the Senate and Chamber of
Deputies (House of Representatives) that are students of the Allende school of politics, are
calling for a Leftist, totalitarian-style Socialist government modeled after the Bolivarian
revolution with international supporters the likes of Fidel Castro in Cuba and Hugo Chavez in
Venezuela, shown in Figure 16. However, as Von Mises notes, totalitarian socialism is much
more than mere bureaucracy. It is the subordination of every individual’s whole life, work, and
leisure, to the orders of those in power and office. It is the reduction of man to a cog in an all-
57
embracing machine of compulsion and coercion. It forces the individual to renounce any activity
of which the government does not approve. It tolerates no expression of dissent. It is the
transformation of society into a strictly disciplined labor-army—as the advocates of socialism
say—or into a penitentiary—as its opponents say. It is different with modern socialism. It is
totalitarian in the strict sense of the term. It holds the individual in tight rein from the womb to
the tomb. At every instant of his life the “comrade” is bound to obey implicitly the orders issued
by the supreme authority. The State is both his guardian and his employer. The State determines
his work, his diet, and his pleasures. The State tells him what to think and what to believe in.
Bureaucracy is instrumental in the execution of these plans. But people are unfair in indicting the
individual bureaucrat for the vices of the system. The fault is not with the men and women who
fill the offices and bureaus. They are no less the victims of the new way of life than anybody
else. The system is bad, not its subordinate handy men. A government cannot do without
bureaus and bureaucratic methods. And as social cooperation cannot work without a civil
government, some amount of bureaucracy is indispensable. What people resent is not
bureaucratism as such, but the intrusion of bureaucracy into all spheres of human life and
activity. The struggle against the encroachments of bureaucracy is essentially a revolt against
totalitarian dictatorship. It is a misnomer to label the fight for freedom and democracy a fight
against bureaucracy (Von Mises 1962, Introduction).
Nonetheless there is some substance in the general complaint against bureaucratic
methods and procedures. For their faults are indicative of the essential defects of any socialist or
totalitarian scheme. In thoroughly investigating the problem of bureaucracy we must finally
discover why the socialist utopias are entirely impracticable and must, when put into practice,
result not only in impoverishment for all but in the disintegration of social cooperation—in
58
chaos. Thus the study of bureaucracy is a good approach to a study of both systems of social
organization, capitalism and socialism (Von Mises 1962, pg. 18.) There is a difference,
however, in the definition of bureaucracy as a collection of government agencies compared to
the concept of “street-level” bureaucracy exhibited in local government offices like the DMV.
The concept of street-level bureaucracy was first coined by M. Lipsky in 1980, who
argued that "policy implementation in the end comes down to the people who actually implement
it.” He argued that state employees such as police and social workers should be seen as part of
the "policy-making community" and as exercisers of political power. Street-level bureaucrats
include police officers, firefighters, and others who "walk the streets" with regular citizens, and
provide services to protect, as well as uphold the laws. Lipsky identified several problems with
street-level bureaucracy, including "the problem of limited resources, the continuous negotiation
that is necessary in order to make it seem like one is meeting targets and the relations with
(nonvoluntary) clients". However, some commentators have challenged Lipsky's model. Tony
Evans and John Harris argue that "the proliferation of rules and regulations should not
automatically be equated with greater control over professional discretion; paradoxically, more
rules may create more discretion." They also argue that the exercise of professional discretion by
street-level bureaucrats is not inherently "bad", but can be seen as an important professional
attribute (www.wikipedia.com)
The offices and organizations in the Chilean Political system at the local level, from first
glance, are highly bureaucratic. Chilean Television Nacional did a report last year at the La
Reina Municipal Registro Civil office in Santiago. The Registro Civil handles everything from
National ID cards, Driver’s licenses, birth certificates, and passports for Chileans living in that
59
municipality. The reporter wanted to conduct interviews with the employees on exactly what
they do at the Registro due to public complaints of being sent back and forth between employees
because “that’s not my job.” At every desk they were turned away because that employee not
the person in charge of giving interviews and they did not have authorization to talk to the
Media. After getting turned away by all seven employees in the tramites civilies (civilian issues)
section the reporter was so aggravated that the “public affairs” representative was “unavailable”
that she left the office cursing the “typical Chilean bureaucracy” and that she couldn’t get her
story done. The lack of a story actually turned into an expose on local government inefficiency
and “clientalismo” that caused the La Reina Registro Civil to explain itself to the Mayor of the
La Reina Municipality (www.tvn.cl.)
A 2003 American study, conducted by Steven Maynard Moody of the University of
Kansas, reiterated the significance of street-level bureaucrats in the political process, asserting
that street-level workers "actually make policy choices rather than simply implement the
decisions of elected officials." They also claim, based on a study of 48 street-level state
employees in two states, that "workers' beliefs about the people they interact with continually rub
against policies and rules" and that the prejudices of the street-level bureaucrats influence their
treatment of citizens. Impartiality is a quality that is sought after when employing street-level
bureaucrats. An impartial street-level bureaucrat will fairly implement the law, and apply it to all
citizens, and not just a select few (www.wikipedia.com.) This type of obscure, collective,
prohibitive administrative office “street-level” bureaucracy is commonplace in Chilean Politics
and Society and is seen as part of day to day life and something to joke about. The lack of
“impartiality” and the abundance of “clientalismo” is the status quo. If you want to accomplish
something in dealing with the government, the best, and maybe the only, way to accomplish your
60
goal is to know someone who knows someone who knows someone who works in the office or
organization of the deputy minister in charge of making decisions regarding your particular
political problem (Personal Contacts 2007.)
Relation to Thesis
This is of course the core of my thesis. It could be that this style of large and small
“street level” bureaucracy is a form of checks and balances in Chilean Society, as told to me buy
a personal contact in Santiago; “you may have to go to 35 different offices to get a permit to start
a business, but the steps are published and available to anyone ahead of time and because you
have to see so many people there are lower chances of corruption to get timely building permits.”
Getting forms of identification may take a while, but perhaps that lowers the possibility of
identity theft, illegal immigration, and international crime fugitives getting identification to avoid
capture. Perhaps this bureaucracy is contributing to the success of the country buy maintaining a
rule of law and order and regulation in society, politics, economics, etc.
National Security System of Chile
The National Security system of Chile is consolidated under the Minister of Defense, Sr.
José Goñi. Chile's armed forces are subject to civilian control exercised by the president through
the Minister of Defense. The current President and Chilean Army General daughter, Michelle
Bachelet, is a former Minister of Defense and is well respected by the various organizations in
the armed forces.
As shown in Figure 17 the Ministry of Defense is composed of the National Defense
Staff, Army, Navy (includes Naval Air, Coast Guard, and Marines) Air Force, Carabineros de
Chile (National Police), the Centre de Intelligencia Nacional de Chile and Investigaciones de
61
Chile (like the FBI.) The Carabineros and Investigaciones de Chile are under operational control
(OPCON) of the Minister of the Interior, Sr. Belisario Velasco.
The National Defense Staff coordinates with the UN for Peacekeeping operations, like
Haiti, and facilitates interoperability among the different services similar to the Joint Chiefs of
Staff and Joint Forces Command (JFCOM) in the US Department of Defense (DoD). The
current Head of the National Defense Staff, General Ivan Fabry Rodriguez, is a graduate of the
US War College at Carlisle Barracks, Pennsylvania and has promoted doctrine arguing for
increased air supremacy by the Chilean Air Forces and purchasing USAF F-16s.
Figure 17. Link Analysis of the Chilean National Security System
62
The Chilean Army is the land force of the Chilean Military. This 45,000-person army
(12,700 of which are conscripts) is organized into a general staff, six divisions, a Special Forces
brigade, and an air brigade strategically located across the country and Antarctica. It is the
dominant land force in South America; never defeated. The military “junta” led the country
from 1973 to 1990 with General of the Army Augusto Pinochet as President and Head of the
Military. This made the Minister of Defense a rather unimportant position to hold.
The Army is mostly supported by the United States, Germany, Israel (as a last resort), The
Netherlands, Switzerland, United Kingdom and France. During the last years and after several
major re-equipment programs, the Chilean Army has become one of the most technologically
advanced and professional armies of America. Chile has acquired 290 second hand Leopard IA
MBTs from Holland and Germany, to replace the M3A1, M41 and M51. A final batch of
between 100 and 120 second hand Leopard IA4 or Leopard II, to complete a force of 460 MBTs,
is also being considered. As of March 2006, the Chilean government has signed a contract to
procure about 100 Leopard 2A3 MBTs from German surplus stocks. Chilean army plans call for
the acquisition of 260 Leopard 2s to replace all MBTs currently in service in the country
(www.wikipedia.org).
The 25,000-person navy, including 5,200 marines, is the “elite” of the Chilean military
and has strong political ties to the government. Of the fleet of 66 surface vessels, only six (soon
to be increased to eight) are major combatant ships, based in Valparaíso. The navy operates its
own aircraft for transport and patrol; there are no fighter or bomber aircraft, yet. It also operates
three (soon to be four) submarines based in Talcahuano, the only Northern coastal harbor in
Chile. The Navy is supplied by the UK, the US, and the Netherlands. The Naval ships permit
the integration of Chile’s Pacific and Southern island regions, thus integrating its disjointed
63
geography and acting as a binding agent for Chile’s tri-continental features. The transport of
passengers, especially during the school year or in cases of emergency, together with the supply
of provisions and fuel, are of key importance to the inhabitants of these insular zones.
The Institution regularly carries out civil operations whereby Navy professionals provide social
assistance and health care to the civilian population, and provide support in cases of natural
catastrophe. It also undertakes preventative education campaigns for Chile’s population on issues
that include security on beaches and seaside resorts and measures to be taken in the case of a
tsunami (www.wikipedia.org).
Started in 1910 as the Chilean Postal Air service, then Chilean Air Force quickly grew in
size and practicality due to the vast length of the country. It became the national airlines in 1929
(LAN Chile) and then a military service was created from a split in 1943. It is supplied mostly
by the US, Spain, and UK. However Chile does build and export CASA-212 aircraft in a joint
venture with Spain. The addition of new F-16Ds with modern armaments will keep the Air
Force the dominant air power in South America (www.fach.cl).
The Carabineros de Chile are OPCON to the Minister of the Interior during peacetime
and during war they act as a paramilitary force in the cities to combat invading armies. All
police officers are trained in military infantry skills at the inter-service Chilean Basic Training
Camp. They are highly respected and well trained, funded, equipped, paid, and employed. They
also have one of the lowest corruption rates in South America (www.heritage.org).
The plain clothes officers of Investigaciones de Chile are tasked to fight organized crime,
cyber crime, drug and human trafficking, and works with Interpol in international jurisdiction
cases. It was formerly known as Direccion de Investigaciones Nacionales (DINA) and worked
with Pinochet and CIA during coup of 1973 (Personal Contacts in Santiago). It trains with the
64
FBI and is a very prestigious organization. The top TV show in Chile is about this organization
searching for an assassin in Santiago (www.tvn.cl).
The US Security company Blackwater recruits Chilean Commandos for contract service
in Iraq and Afghanistan guarding US State Department employees. This has caused heated
political debate in the Senate and Chamber of Deputies (www.opensource.gov).
Relation to Thesis
The National Security system of Chile does not directly relate to my thesis. Perhaps the
military dictatorial government of Augusto Pinochet creating unnecessary administrative offices
to hire Chileans and lower unemployment can be associated to the National Defense system, but
it is an obscure association at best and those policies and that form of government was voted out
of office in 1990. The recent death of Pinochet in December of last year could start the healing
process for the finger-pointers on the left to come together with conservatives on the right and
start enacting legislation to bring to an end the national feeling of shame over military rule
during the 1970s and 1980s. It’s a feeling similar to that of the post-civil war southeastern US
(Buckman 2006, pg 148.)
The Chilean military is currently the dominant military power in South America.
Competition from Venezuela could launch and arms race between the two countries, however
Chile would have US and UK support, technology, and training, most notably the F-16, while
Venezuela would have former Soviet republics, Iran, and North Korea. Most of their technology
is from the 1960s and 70s and do not have a comparable military industrial complex nor the
budget to support the amazing logistical requirements of war.
65
Conclusion
Bureaucracy and bureaucratic methods are very old and that they must be present in the
administrative apparatus of every government the sovereignty of which stretches over a large
area. The Pharaohs of ancient Egypt and the emperors of China built a huge bureaucratic
machine and so did all the other rulers. Medieval feudalism was an attempt to organize the
government of large territories without bureaucrats and bureaucratic methods. It failed utterly in
these endeavors. It resulted in a complete disintegration of political unity and in anarchy. The
feudal lords, originally officeholders only and as such subject to the authority of the central
government, became virtually independent princes, fighting one another almost continually and
defying the king, the courts, and the laws. From the fifteenth century on curbing the arrogance of
the vassals was the main task of the various European kings. The modern state is built upon the
ruins of feudalism. It substituted bureaucratic management of public affairs for the supremacy of
a multitude of petty princes and counts (Von Mises 1962, pgs. 15-16).
Isabel Allende ended her passage on Chilean Bureaucracy by suggesting that this
obsession of ours with legality is a kind of safeguard against the aggression we carry inside;
without the nightstick of law we would go after one another tooth and claw. Experience has
taught us that when we lose control we are capable of the worst barbarism (referring to the
human rights abuses during the military dictatorship of GEN Pinochet), and for that reason we
try to move cautiously, barricading ourselves behind bulwarks of paper bearing seals.
The issues facing Chile today resulting from conditions set by history and the elements of
national power are few when compared to its neighbors. However, even a few problems can
keep a country from reaching its full potential.
66
Figure 18. Pentagon Bureaucracy Cartoon
Is Bureaucracy a problem in
Chile and much of South
America? Yes, but some
levels are necessary. Even in
our own country, in our own
military, the Pentagon has
established a program to
minimize its own bureaucracy.
A cartoonist from The
Christian Science Monitor was quick to poke fun at that program in Figure 18.
Is Chile’s penchant for bureaucracy restraining it from its true potential socially,
economically and politically? Yes. As shown in this analysis efforts to “cut the red tape”
would benefit all elements of national power, directly or indirectly, by intervention or
association.
Recommendation
Representative elections of regional leadership would lower the requirements for
bureaucratic organizations at the national level making decisions and controlling resources of the
12 regional governments of Chile. Continue plans to modernize regional and national
government IT infrastructure. Continue liberal media policies to help keep government
transparent. The advantage of this system of government reforms, with corresponding fiscal
reforms to maintain the current economic growth, can easily be forecasted. This would in
essence create a United States of Chile increasing social, economic, and political mobility, both
domestically and internationally and slowly erode the state of Chilean bureaucracy.
67
References:
Physical System References:
1. Geography of Chile, http://www.geographia.com/chile/ , 2007
2. Conversations with COL Mario Zamora Flores, ret., Ejercito de Chile, Inteligencia
Militar, 2002-2007
3. Word Travels info on Chile Climate and Weather,
www.wordtravels.com/Travelguide/Countries/Chile/Climate/, 2007
4. Chile Environmental Challenges from www.eia.doe.gov/emeu/cabs/chilenv.html,
2007
5. Conversations with Jaime Olivos Salinas, sales manager of Citroen Serrano, Santiago,
Chile, 2002-2007
Social System References:
1. Television Nacional de Chile, www.tvn.cl
2. www.emol.cl
3. Personal Travels in Chile, 2001-2006
4. Personal Contacts in Santiago de Chile
Infrastructure and Technology References:
1. Chile Press Highlights, 28 MAY 07- 03 JUN 07, OSC emails from
www.opensource.gov.
2. Chilean International Freight Transport, 05/30/2007 7:06:17 PM,
http://www.foreigninvestment.cl/index/plantilla3.asp?id_seccion=7&id_subsecciones
=31
68
3. Chilean Industry and Trade, 06/04/2007 7:26:11 PM,
http://www.ddg.com/LIS/aurelia/chiind.htm
Economic System References:
1. Latin America, Robert T. Buckman, 2006, Chile’s Economy, pg. 107
2. Chile's Economy from www.countrystudies.us
3. Chile’s Minister of Economy statistics from www.economia.cl
4. Chile: Economic 'Freedom' and Political Repression from
http://www.tni.org/detail_page.phtml?page=books_pamp1
5. Is Chile a Neoliberal success? from
http://dollarsandsense.org/archives/2004/0904cypher.html
6. Chile’s Economy from CIA World Factbook,
https://www.cia.gov/library/publications/the-world-factbook/geos/ci.html#Econ
Information System References:
1. Latin Politics, Global Media, Elizabeth Fox and Silvio Waisbord, 2002, pg ix
2. World Press facts at www.worldpress.org
3. Chile country study at www.countrystudys.us
4. CIA world Factbook at www.cia.gov/worldfactbook.html
5. GSM Network World Coverage map at www.coveragemaps.com
6. Santiago Facts at www.santiago.cl
Political System References
1. Ludwig Von Mises, Bureaucracy, 1962 edition
2. Monty Python’s Life of Brian, Judean People’s Front on www.youtube.com
69
3. Chilean Society and Associations, www.countrystudies.us
4. Gregory Weeks, Assistant Professor of Political Science at the University of North
Carolina at Charlotte, Third World Studies, Spring 2001
5. Bureaucracy and Street-Level Bureaucracy searches from www.wikipedia.com
6. Problemas de la Registro Civil, 2006, www.tvn.cl
7. Personal contacts in Santiago de Chile
CPT Josh Stiltner is a 2000 graduate of the University of Montana

with a Bachelor of Arts Degree in Anthropology. He has held
various leadership and staff positions in USAREUR, XVIII Airborne
Corps, and USAJFKSWCS. His military training includes the
Engineer Officer Basic Course, the Infantry Captains Career Course,
Combined Arms Staff Services School, the Psychological Operations
Qualification Course, and the Advanced Regional Analysis Course.
He is currently assigned to D CO, 9th PSYOP Battalion (Tactical), 4th
PSYOP Group, USASOC as the Tactical PSYOP Development
Detachment Commander.
70

CPT Josh Stiltner's Insight on Overcoming Chile's Bureaucratic Barriers

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CPT Josh Stiltner, Latin America Seminar, ARAC 03-07, USAJFKSWCS

business, political, and to a lesser degree military way of interaction persist?

negative in a positive way, motivates humans to do something, anything. Punishment is negative

entrepreneurship is another bureaucrat at their desk requesting a certificate of authenticity,

of national power; Physical Environment, Social, Infrastructure and Technology, Economic,

central Chile was the most warlike group (http://countrystudies.us/chile/).

Despite its geographical isolation by formidable barriers--the Andes Mountains on its

national identity (http://countrystudies.us/chile/).

had committed itself, albeit inadvertently, through a plebiscite, to allowing a transition to

own national motto, "By reason or by force” (http://countrystudies.us/chile/).

Rettig Commission), an eight-member investigatory body created by the government of Patricio

imprisonment of thousands of other opponents of the Pinochet regime

system of local government administration based on corporatism, it avoided the corporatist

offered by students of the University of Chicago's Milton Friedman, a spokesman for

sweeping tax reform, among other measures (http://countrystudies.us/chile/).

authoritarian implementation of antistatist, free-market policies (http://countrystudies.us/chile/).

plebiscite "following Pinochet's rules" (http://countrystudies.us/chile/).

Aylwin, a Christian Democrat, easily won the long-awaited presidential election on

from a population accustomed to a generous cradle-to-grave welfare system, in Chile similar

reform measures were not particularly effective (http://countrystudies.us/chile/).

in poverty in 1993, with 1.2 million living in extreme poverty (http://countrystudies.us/chile/).

assured a continuation of democratic government under another politically moderate president,

penchant for consensus-building, as positive traits (http://countrystudies.us/chile/).

giving priority to rural development and eradication of poverty (http://countrystudies.us/chile/).

seventeen years in power (http://countrystudies.us/chile/).

Following an agreement in 1993 between Pinochet and Andrés Zaldívar Larraín,

of Chile, while thousands demonstrated against him (http://en.wikipedia.org).

the publication by the US Senate Permanent Subcommittee on Investigations of a report

Pinochet was indicted by the Chilean justice (http://en.wikipedia.org).

office— a record in the country's history (http://en.wikipedia.org).

during the previous administration, especially in Chiledeportes, a government sports funding

organization. There were also accusations of misappropriation of funds channeled through

young as 14 years of age without parental consent, a nine-month Government-Congress deadlock

dissatisfied lawmakers from both chambers of Congress—the so-called díscolos ("disobedient,"

"ungovernable")—, which have jeopardized the coalition's narrow Congress majority on a

wing opposition (http://en.wikipedia.org).

Figure 1. Regional Map of Chile

The Physical Environment System of Chile has been

attributed to the Political, Economic,

Infrastructural/Technological, and Military successes of that

country both historically and in modern times. Twelve

Regions, numbered north to south, plus the Metropolitan

Region of the national capital, Santiago de Chile. The

country changes significantly from north to south. Region I

encompasses one of the driest places on Earth, the Atacama

Desert, and Region XII encompasses one of the coldest and

wettest places, Patagonia. Regional boundaries are drawn

along naturally occurring topographic features. Regional

Governments and their Capitals assist the national

government in local governance, supplying services and

information to the regional populations. (Olivos Salinas,

During colonial times the Spanish Conquistadores

found it so difficult to reach the country by ship, and

therefore so difficult to return to Spain, that once they arrived

the majority stayed to start life anew in the new world.

Unlike neighboring Peru, Bolivia and Argentina this resulted

throughout history with few exceptions.

language, and political ideologies associated with them.

slope of the Andean peaks (www.geographia.com).

extremity is marked by Cape Horn, a treacherous headland surrounded by almost continuously

Figure 2. Geology of Chile

storm-tossed seas and passable only through the foggy stillness